Crypto Analyzer

U.S. Judge Criticizes SEC’s “Borderline Irrational” Objections to Voyager-Binance Deal

A U.S. Judge has criticised the United States Securities and Exchange Commission’s (SEC), objections to the recent legal battle between cryptocurrency company Voyager Digital Ltd. and Binance.

Voyager announced plans to merge with Binance in February 2023. Binance is a large cryptocurrency exchange. SEC filed a complaint claiming that the merger would infringe U.S. securities law.

The SEC claimed Binance’s BNB token (which would be used in the merger company’s operations) was an unregistered security. The SEC argued that Binance’s BNB token, which would be used in the merged company’s operations, was a security since investors expected to gain from the efforts of Binance’s management.

The arguments of the SEC were rejected by William Alsup, U.S. District Court Judge, who stated that they were “borderline rational.” Alsup pointed out that Binance was more than a security. It was used to pay transaction fees on Binance.

Alsup also complained that the SEC failed to give clear guidelines regarding how cryptocurrencies should regulated. Alsup suggested that the current SEC approach was inconsistent and “haphazard”.

Voyager and Binance won the case without having to face any additional legal hurdles. Voyager CEO Steve Ehrlich stated that the ruling was a positive step forward for the entire cryptocurrency industry.

Since years, the SEC has been trying to regulate cryptocurrency. Although some cryptocurrencies like Bitcoin and Ethereum are not considered securities, others are subject to SEC inspection. The Binance case highlights how difficult it is to apply traditional securities laws in the face of emerging digital assets.

Judge Alsup’s decision highlights the need to regulate cryptocurrencies more clearly and consistently. It is possible that legal disputes will continue to rise as the industry evolves and grows. With greater regulatory clarity, these disputes can be resolved in a fair, predictable manner. This will allow for continued innovation in the cryptocurrency space.